Aitkin was founded in 1870 when the Northern Pacific Railroad was extended to that point.[9] The city and county were named for William Alexander Aitken, a partner of the American Fur Company and chief factor of the company's regional operations in the early 19th century.[10] Many industries had attracted people to the town. In the late 19th and early 20th century, a massive wave of immigration, most likely from present day Ireland, Germany, and Scandinavian countries, had resided into the Aitkin area to pursue the logging and riverboat industries. After the Great Depression and World War II, the logging industry has changed the town into a farming community, consisting mostly of cattle and poultry, which continued until the late 1970s to early 1980s. A creamery [11] and a turkey plant was one of the town's major economic and industrial contributors. Not many farms are currently left over in Aitkin and by the 1990s, Aitkin has changed into a community for retirement and tourism, especially with the lake areas and that continues up to today. Health care, human services, and non-profit organizations are one of the major contributors to the modern day Aitkin economy, along with the hospitality industry.

Aitkin throughout the years in various locations had been impacted by occasional flooding of the Mississippi River. Major notable floods had reached past 20 ft. such as the 1950 flood and nearly 19 ft. such as the summer flooding in 2012. Many damage has taken place of the town because of the floods, and the 2012 flood was one of the first floods that overflowed the lake areas, flooding the cabins, since it was based on heavy rainfall instead of melting snow.

The Butler's store is one of Aitkin's major landmarks and has gone through many transformations. Opened in 1903, the Butler store was a home for shopping and entertainment, including an Opera house, which debuted a performance starring Judy Garland. The Butler store has transformed throughout the years from grocery stores, to a fabric/clothing store, to other little shops. In 2010, Butlers had closed, with plans being developed to change it into a homeless shelter, but that didn't happen. But in 2012, the Butler store was reworked as the Butler building, revitalizing the elements of the original Butler building from the early 20th century. Currently, the Butler building contains a coffee shop called The Beanery and also has dress shop. There has also been a revitalization of the building with musical performances being held in The Beanery, bringing back more themes from the original landmark. The Butler building is located one block away from the only stop light in the entire county.

As of the census[3] of 2010, there were 2,165 people, 936 households, and 483 families residing in the city. The population density was 984.1 inhabitants per square mile (380.0/km2). There were 1,097 housing units at an average density of 498.6 per square mile (192.5/km2). The racial makeup of the city was 95.5% White, 0.8% African American, 1.5% Native American, 0.3% Asian, 0.1% from other races, and 1.6% from two or more races. Hispanic or Latino of any race were 1.2% of the population.

There were 936 households of which 27.2% had children under the age of 18 living with them, 33.8% were married couples living together, 13.5% had a female householder with no husband present, 4.4% had a male householder with no wife present, and 48.4% were non-families. 43.5% of all households were made up of individuals and 25.1% had someone living alone who was 65 years of age or older. The average household size was 2.08 and the average family size was 2.88.

The median age in the city was 44.3 years. 22.2% of residents were under the age of 18; 7.2% were between the ages of 18 and 24; 21.4% were from 25 to 44; 22% were from 45 to 64; and 27.1% were 65 years of age or older. The gender makeup of the city was 45.3% male and 54.7% female.

There were 892 households out of which 22.5% had children under the age of 18 living with them, 36.5% were married couples living together, 9.8% had a female householder with no husband present, and 51.3% were non-families. 46.5% of all households were made up of individuals and 30.2% had someone living alone who was 65 years of age or older. The average household size was 2.03 and the average family size was 2.90.

In the city the population was spread out with 20.8% under the age of 18, 7.5% from 18 to 24, 21.6% from 25 to 44, 17.6% from 45 to 64, and 32.4% who were 65 years of age or older. The median age was 45 years. For every 100 females there were 76.2 males. For every 100 females age 18 and over, there were 69.8 males.

The median income for a household in the city was $47,574, and the median income for a family was $58,071. Males had a median income of $50,577 versus $31,641 for females. The per capita income for the city was $26,471. About 7.1% of families and 9.2% of the population were below the poverty line, including 11.0% of those under age 18 and 20.9% of those age 65 or over.

American film actress and singer Judy Garland performed at the opera house in Aitkin as a young child. A small display related to Garland can be found in the converted opera house, now The Butler Building, in downtown Aitkin.[14]